why is extrude locked to z axis
Pressing E performs "Extrude and Move on Normals", for a basic cube extruding the top face will appear to be extruding on the global z-axis while extruding a side face will match the x or y axis.

I don't know which version you think this performed different, not certain with 2.5x but I have 2.62 through to 2.72 available here and they all work that way.

There is a chance that you had a bad habit before. Pressing E will extrude and start moving the new geometry, right-clicking will cancel the move, but you can right-click again on the selected face/s and start moving the new extrusion. Maybe you had been cancelling and picking up the geometry without realizing it.

You can change this behaviour if you wish by opening the preferences and adjusting the method used. While in the Input settings search for extrude and adjust the one saying "Extrude and Move on Normals" under Mesh. When you expand it you will see a text field with view3d.edit_mesh_extrude_move_normal - change that to mesh.extrude_region_move. This should give the behaviour you are looking for.



You can then Save User Settings so that it is set that way each time you use blender.